As we reflect on the 2022/2023 Financial Year, it’s evident that both the Gold Coast and Northern NSW property markets have faced their fair share of challenges. But amidst the rising interest rates and severely low inventory levels coupled with buyers’ fears of overpaying, these markets have showcased their resilience and have some exciting prospects ahead. Interestingly, these two neighbouring markets have responded quite differently to these conditions despite historical similarities in price growth and fluctuations. Let’s take a closer look at how these regions have uniquely weathered the storm and what lies on the horizon.
Gold Coast: A Thriving Oasis in a Competitive Market
Despite concerns about rising interest rates and economic uncertainty, the Gold Coast property market has remained strong, thanks to an overwhelming demand and limited supply. With listing levels well below year-on-year averages being exacerbated by the nation-leading population growth into South East Queensland, it certainly made for an interesting year.
Prime locations and asset types, like beach side and waterfront homes resulted in the Gold Coast becoming a hotspot for real estate investment. These have continued to draw strong interest, maintaining their values or even experiencing growth compared to the peak of the market in 2021.
While less desirable locations, or areas with a higher volume of inventory, have experienced a price regression of 5-15%, it’s important to note that these suburbs still boast prices higher than pre-COVID levels. Our buying clients have taken advantage of this market, with an average purchase of $1.45 million and an average search time of just 52 days.
For investors, the low vacancy rates and growing population have created a favourable environment, leading to increased rental demand and rising rents. Spring and Summer months have been particularly competitive, with properties receiving multiple applications and achieving rents higher than the advertised price. As we anticipate an influx of families from interstate in preparation for the 2024 school year, investors and landlords should expect strong results in the near future.
All of this juxtaposed investors and buyers who purchased in the last three to four years as they continue to feel the pinch of higher interest rates.
During this financial year, at Rose & Jones, our investor clients enjoyed an average gross rental yield of 4.98%, with all properties secured in highly desirable locations primed for strong capital growth.
Overall, the Gold Coast property market has remained extremely resilient through an uncertain and challenging economic period, and although stock levels are almost assuredly going to rise in the coming six to twelve months, the underlying sense is that there remains a deep buyer pool ready and waiting to purchase when the right opportunity presents itself.
Optimism Amid Challenges: The Northern NSW Property Market
While Northern NSW, including beautiful Byron Bay and its surrounding lifestyle markets, suffered far more than other regions, there is still room for optimism. One factor impacting the market has been the fear of recurring floods, which has impacted buyer confidence in certain areas. However, it’s crucial to remember that this market has previously experienced rapid growth due to various factors, including Australian buyers who couldn’t travel internationally during the pandemic.
The short-term holiday rental market was booming during the travel restrictions, attracting investors looking for lucrative returns. However, as international travel is back on the cards, and local tourism markets face cost-of-living pressures, some properties are generating lower returns for investors, with many also feeling the crunch of the rate rising cycle.
Some have opted to trade out of these assets. We have seen properties trading for 20-30% below the original ask price, with some location and asset types now achieving or seeking prices in line with pre-covid levels – both beachside and hinterland acreage types.
Despite these challenges, areas like Kingscliff and Casuarina have shown better resilience due to their proximity to major economic hubs like Gold Coast and Brisbane, offering attractive opportunities for both investors and homebuyers.
A Tale of Two Markets: How History Informs the Future
Looking back at the aftermath of the Global Financial Crisis (GFC), both the Gold Coast and Northern NSW markets experienced similar challenges, with values falling significantly, as much as 20-30%.
However, in the present day, we see a diverging trajectory. While Northern NSW markets are showing signs of recovery and approaching pre-COVID levels, the Gold Coast has evolved into a market with tremendous potential.
With a wave of owner-occupier purchases, growing economic activity, and a competitive rental market, the Gold Coast is set to become one of the best-performing areas in the country over the next decade. The upcoming Olympics and various infrastructure projects further solidify the region’s prospects and appeal.
The Road Ahead: Opportunities and Prospects
As we move forward, both the Gold Coast and Northern NSW property markets present unique opportunities and prospects. The Gold Coast remains a shining beacon of growth and potential, attracting buyers and investors with its strong demand, limited supply, and promising future.
Meanwhile, Northern NSW continues to adapt and evolve, with areas like Kingscliff and Casuarina offering attractive investment options. As the region overcomes challenges and regains momentum, it’s poised to emerge even stronger.
While the 2022/2023 Financial Year brought its share of trials, the property markets of the Gold Coast and Northern NSW have shown remarkable resilience and adaptability. As we embrace the future with optimism, it’s clear that these regions hold great promise for buyers, investors, and all those seeking a piece of paradise.
